Tens of millions of Americans are choosing to pay overdraft fees in spite of new rules allowing them to opt out of such arrangements, putting banks on track to collect record revenues from the charges, analysts and consumer groups say.

Federal Reserve regulations that came into effect last July require banks to obtain customer permission before charging overdraft fees on ATM withdrawals and debit card purchases. Overdraft fees can range from $25 to $35 per transaction and are incurred when withdrawals or purchases exceed account balances.

New research from Moebs Services, which analyses financial data, shows that about 100m of the 130m US checking account holders are on track to pay overdraft fees on ATM withdrawals and debit cards.

Among consumers who are overdrawn 10 or more times a year – usually low-income people who can least afford the extra fees – the “opt in” rate is higher, at nearly 98 per cent.
As a result, Moebs expects banks to charge a record $38.5bn in overdraft fees in 2011, up from $36.5bn in 2010.

Craig Siegenthaler of Credit Suisse said some banks have “opt-in” rates as high as 90 per cent. Notable exceptions are Bank of America, which last year stopped allowing customers to overdraw accounts on debit card purchases, and Citigroup, which has never allowed overdrafts on ATM withdrawals and debit-card purchases.

Many smaller banks are continuing to charge overdraft fees of $25 a go or more. “Smaller banks have had very high take-up rates,” said Leslie Parrish, a senior researcher with the Center for Responsible Lending.

Banks say high “opt in” rates show customers are willing to pay for services they value. But consumers’ groups argue that aggressive bank marketing practices are the real reason so many account holders continue to pay overdraft fees when they can opt out.

“Banks did not always explain to consumers that there would be no fee for refusing overdraft privileges,” said Jean Ann Cox, director of financial services for the Consumer Federation of America, which last year filed a complaint with regulators over the marketing of these programmes.

“Consumers were not given any information that shows how astronomically expensive it is to borrow money this way.”

A 2008 Federal Deposit Insurance Corporation study found that a $27 fee for a two-week overdraft of $20 would be equivalent to an annualised interest rate of 3,520 per cent.

The Office of the Comptroller of the Currency responded to the CFA complaint by urging national banks to “promote informed decision-making” on overdraft protection.

In October, the OCC fined Woodforest National Bank of Texas $1m for charging a “continuous overdraft fee” on accounts not brought to a positive balance within seven days and for deceptive marketing that caused some customers to incur excessive overdraft fees.